Canada needs a transition plan as it moves from assembly to r&d

General Motors’ plans for Oshawa Assembly are a microcosm of the larger trends at play in the Canadian auto industry.

GM plans to build a track on part of the site, providing a place to test the technology it develops for autonomous vehicles, connectivity and infotainment at its nearby Oshawa and Markham, Ont., technical centres.

It’s just the latest sign that many in the industry increasingly view the Greater Toronto Area and nearby Waterloo as an emerging Silicon Valley North, what with the abundant talent, research universities and brilliant leaders in the fields of artificial intelligence, engineering and other crucial facets. It’s no wonder that automakers and tech companies see a future in Canada when it comes to r&d.

But even as the tech sector booms, manufacturing continues its downslide. Oshawa Assembly, which once employed about 22,000 workers, will employ only 300 when it transitions into a parts plant for GM and other suppliers.

This is a better outcome than what many assumed earlier in the year — a complete closure — but the fact remains that Canada will be down to nine assembly plants come 2020. And thousands of workers at Oshawa, its suppliers and other businesses that depend on the plant will be out of jobs.

GM might increase the number of workers at Oshawa as it gains more business for the plant, just as southern Ontario will likely continue creating jobs for those in the tech sector. But tech facilities do not have the same jobs-multiplier effect as manufacturing.

Things aren’t all bleak, however. Toyota has invested heavily in its Canadian footprint, to the tune of $1.4 billion. And most remaining Canadian assembly plants, with the possible exception of Fiat Chrysler’s Brampton, Ont., factory, seem to be stable. But there’s a caveat: The North American new-vehicle market is declining. While it remains strong by historical standards, falling sales mean less vehicle production, which means fewer jobs.

Look, for example, at the 1,500 people who will be out of work in September after FCA cuts a shift at its minivan plant in Windsor, Ont.

As the market declines and as more assembly plants find themselves in danger of closing in the long term, the federal and provincial governments must put an emphasis on helping displaced autoworkers at assembly and supplier plants transition into new jobs.

Like Oshawa, the Canadian auto sector appears to be in a state of flux, one that will have winners and losers.

The feds and the Ontario government cannot afford to be reactive, offering to assist with transitions only after a company announces cuts. Instead, they must be proactive to maintain Canada’s auto-manufacturing footprint while also training and educating Canadians for a rising tech sector.